Executive Summary

Singaporean investors on HardwareZone are actively discussing various retirement strategies, with a strong focus on maximizing returns while managing risk. There’s a notable divide between those who prefer DIY investing using platforms like Interactive Brokers (IBKR) or Endowus, and those who opt for private banking or relationship managers (RMs) for a more hands-off approach. The forum highlights the importance of understanding investment products and avoiding high fees, with many users advocating for low-cost index ETFs. Recent discussions also touch upon home loan rates, CPF changes, and the impact of inflation on retirement planning. A key point emphasized is the need for a well-diversified portfolio and a long-term investment horizon. Home loan rates are fluctuating, with some banks recently increasing their fixed rates to around *2.7%, while CPF interest rates for the Medisave Account (MA) are currently at 4.14%*.

Key Developments

Home Loan Interest Rates

Recent discussions indicate that home loan interest rates are seeing some volatility. Several users have noted that fixed-rate home loans have recently been increased by some banks. Maybank, for instance, reportedly raised its 2-year fixed rate to *2.70% p.a., up from 2.50%* p.a. The trend seems to be influenced by market expectations regarding future interest rate cuts by the US Federal Reserve.

“Maybank just jacked up 2yr fixed rate loan to 2.70% p.a. in past week or so (from previous offering of 2.50% p.a.).” –
Despite these increases, some users believe that these rates will likely fall again as the Fed cuts rates. There’s also a debate on whether fixed rates are currently higher due to market perceptions of sustained inflation. A user pointed out that fixed rates are typically 0.5-1%**** above the Singapore Overnight Rate Average (SORA).

CPF Updates and Considerations

The forum also covers recent changes and considerations regarding CPF. For CPF transfers of existing savings, interest starts accruing in the account from the current month. However, for fresh injections, interest begins the following month. Users are also discussing the implications of the upcoming changes to the Special Account (SA) for those aged 55 and above, starting in early 2025. This change will make all OA funds more liquid, prompting discussions about whether to repay housing loans with OA funds when better returns can be found elsewhere.

“For CPF transfers of existing CPF savings, you will start earning interest in your account from this month. However, if the CPF savings are fresh injections, it will start earning interest in your account from the next month.” –
The Basic Healthcare Sum (BHS) and Full Retirement Sum (FRS) are also a topic of discussion. The FRS is projected to reach *SGD 228,200 by 2027, with an annual growth rate of around 3.5% from 2025-2027. The BHS has historically grown at an average of 4.63%* year-on-year from 2017 to 2024.

Investment Platform Preferences

There’s a clear divide between users who prefer DIY investment platforms and those who rely on banks and RMs. Platforms like Endowus and Interactive Brokers (IBKR) are frequently mentioned as low-cost alternatives to traditional bank offerings. Users highlight the high fees associated with some bank unit trusts, with one user citing a *3%* one-time fee for UOB’s unit trusts.

“A 3% sale charge is basically daylight robbery, pls dont be an idiot and give away your money for free.” –
Many users emphasize the importance of low expense ratios when selecting ETFs. The Amundi MSCI World S$ denominated ETF, available on POEMS with a *0.1%* expense ratio, is highlighted as a good option. The discussion also highlights the convenience of bank RMs for some, particularly those with busy schedules, even if it comes with higher fees.

Community Insights

User Experiences

Several users shared their personal experiences, highlighting different approaches to investing. One user mentioned their wife’s successful investment in DBS funds, which yielded a good return without active management. Another user shared a more active approach, focusing on a diversified portfolio consisting of index funds, Singapore blue chips, and a small cash allocation. Some users have had success with NTUC Living Whole Life policies, citing returns exceeding *3.5%* CAGR.

“My wife bought all the funds from DBS. She didn’t do anything but made quite a tidy sum.” –
A user shared a story of supporting their family while dealing with their father’s gambling debts, emphasizing the importance of breaking from a “poor mindset curse”. Another user detailed their experience with using cheap debt, such as government loans for education and auto loans, to grow their wealth. A user shared a negative experience with UOB unit trusts and emphasized the need to do thorough research.

Tips and Recommendations

The community offered numerous practical tips. Users recommend accumulating a 3-6 month emergency fund in liquid, low-volatility assets before starting to invest. There’s strong consensus on avoiding high-fee investment products like some unit trusts and whole life insurance policies. The importance of understanding the underlying investment products and avoiding emotional reactions to market fluctuations is stressed.

“You absolutely don’t want to sell depressed assets in a down market.” –
Several users recommend using platforms like Endowus or IBKR for low-cost access to ETFs. It’s also advised to focus on long-term investing and avoid trying to time the market. Users suggest considering the “4% rule” or “3% rule” for retirement planning, using a percentage of one’s net worth to estimate sustainable withdrawals. One user recommended the book “The Psychology of Money” for building a good investment mindset.

Important Considerations

Users cautioned against relying solely on RMs for investment advice, as their incentives may not always align with the investor’s best interests. The high fees associated with some bank products were repeatedly flagged as a major concern. The risk of US sanctions and the need for diversification was mentioned. The forum also discussed the need to account for inflation and the potential for currency fluctuations when making investment decisions.

“Don’t just contend with buying the lowest risk product (cash smart secure, fixed deposit). That’s like being reasonably fit but still do 1kg dumbbell lifts to make yourself feel that you made progress.” –
There was also a discussion about the downsides of some insurance products, such as ILPs, highlighting their high sales charges and lack of liquidity. The importance of understanding the difference between stocks and ETFs was emphasized, as well as the concept of expense ratios. Users also warned against the dangers of hyperinflation and the need to diversify against such risks.

Looking Ahead

The forum anticipates continued discussions on the impact of potential US interest rate cuts on Singaporean home loan rates. Users are also closely watching the implementation of CPF changes for those aged 55 and above. There’s an expectation for more innovative low-cost investment options to become available. The community will likely continue to debate the pros and cons of DIY investing versus using RMs, with a strong focus on value for money and transparency. Users will continue to share their experiences and insights, contributing to a more informed and engaged investment community. The future direction of the market and its impact on retirement strategies will remain a key topic of conversation.